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- Nov 25, 2007
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you need to have an emergency fund of at least $500 because emergencies are bound to happen and you never know when.
Dave must have very cheap emergencies.
you need to have an emergency fund of at least $500 because emergencies are bound to happen and you never know when.
I'm only in high school, but I am taking a personal finance class and it is based off the Dave Ramsey program called Financial Peace University. I'm pretty sure you can buy it on DVD and it tells you everything you need. His videos are very good and he says that 80% of millionaires are first generation rich and that you just need to be smart with your money. He also makes the point to never buy new cars, just buy a two or three year old used reliable car because a new car depreciates a lot over a short period of time. Also never use a credit card, a debit card can do everything a credit card can. He also emphasizes the point to purchase things in cash and to save money for things no matter how much it costs. Also he says you need to have an emergency fund of at least $500 because emergencies are bound to happen and you never know when.
I would only tell someone to follow his advice if they are incapable of managing their finances and have no self control on spending.
I'm not trying to start an argument, I have no experience with finances and you do. Dave Ramsey seems to me like he knows what he is talking about.
my retirement is well funded
I am we'll aware or what Ramsey says. It is for people who cannot control their spending. Myself and many of my friends have enough self control and education on finance to make sound decisions. I treat my credit cards as debit cards and pay all off at the end of the month. As a result, I have accumulated well over a thousand dollars in points and perks, been able to have my CC agency settle merchant disputes that I would not be able to with a debit card, and my credit score is through the roof. If you choose not to use any credit or manage, your score will suffer requiring larger down payments and interest rates on necessary loans like a house or car. If we want to talk straight basics on spending, learning to manage credit cards appropriately and what goes into determining your credit score are wise for now and the future and builds a credit base that makes life better now and later - an opportunity few have like academy graduates.
If I was asked by someone for financial advice, here's what I would do. First, I would encourage them to obtain a credit card and learn how to use it like debit. This establishes the appropriate discipline without assuming much risk. If they can do that, I would teach them about credit scores, what they mean, what it gets you, and how to work towards a good one. Then I would explain the types of retirements accounts, the difference between them, and show them the number on what investing now means for the future and how interest works. I would explain dollar cost averaging, risk portfolio management, and the difference between available monetary assets such as bonds, mutual funds, index funds, stocks, money markets, etc.
If they are unable to manage credit card spending, can't manage their accounts actively, etc. then I would refer them to Ramsey. I assume if someone is asking, they care enough to learn. If they find themselves unable to learn it or unable to discipline themselves, then I advise going the route of Ramsey. He is a last resort to me for people who want to learn how to manage their finances and cannot.
I took the time to read and educate myself thoroughly on finances. My credit score is nearly perfect, my retirement is well funded, I maintain active market assets for future goals, pay my bills, and have some left over to have some fun. I taught a few friends what I learned and they are now in the same position.
When asked advice, that is my philosophy. I'd rather not assume the person is incapable.
Do you have the names of any books or websites that I can start reading? I do want to learn a lot more about finances and pretty much treat it like a second job.
I'm not trying to start an argument, I have no experience with finances and you do. Dave Ramsey seems to me like he knows what he is talking about.
The author is a former submariner but often posts at a SWO community social media site. His recommendations areHere are two sources I gave my about to graduate and commission daughter:
This is a great book for young military members by a retired Naval Officer about achieving financial independence in anticipation of military retirement. He spends his time now writing about financial independence for military members.
https://the-military-guide.com/start-here/
This is also a good site for learning about investing for new AD members: https://jlcollinsnh.com/
A lot of emphasis on keeping debt low, index funds, and auto investing.